Time to prepare a ‘minus-US’ trade strategy, says ex-deputy minister

 

Former deputy minister Ong Kian Ming said Malaysia and Asean should reconfigure supply chains, deepen regional trade ties, and explore new partnerships with Asia, the EU, GCC and Mercosur.

PETALING JAYA: 

Former deputy minister Ong Kian Ming has urged Malaysia and its Asean partners to start seeking a “minus-US” trade strategy in light of US president Donald Trump’s recent “reciprocal” tariffs.

Ong said the bloc should seize this moment as a “unique opportunity” to re-configure supply chains, deepen intra-Asean trade and investment while forging stronger ties with alternative partners across Asia, the European Union, the Gulf Cooperation Council (GCC) and Mercosur.

“We need to start thinking about our ‘minus-US’ options, moving forward,” he said in a post on X.

Ong, who previously served as deputy investment, trade and industry minister, said that while Malaysia and Asean should continue engaging with Trump’s administration, hopes for a tariff reversal were slim.

“If exemptions are given to individual countries, this will create disincentives for companies to re-invest in the US,” he said.

“Trump will want to extract more and more concessions from different countries without necessarily giving something in return, quickly. This is part of the ‘Art of the Deal’.”

On April 2, Trump announced a series of new tariffs that directly increased import duties on several of Washington’s Southeast Asian trading partners.

The hardest hit were Cambodia with a basic tariff of 49%, followed by Laos (48%), Vietnam (46%) and Myanmar (44%).

Thailand faces a tariff of 36%, Indonesia 32%, Brunei and Malaysia 24% each, the Philippines 17% and Singapore 10%.

Although the semiconductor sector has so far escaped direct tariffs, Ong warned that this could change.

He cited analysts saying that the semiconductor sector could still be affected under Section 232 of the Trade Expansion Act, the same law Trump used to hit steel and aluminium imports with 25% duties.

“Trump would want to stamp his mark to show that his tariff policy can work better than Joe Biden’s Chips Act to increase semiconductor manufacturing in the US.

“Semiconductors are exactly the type of high-value manufacturing activity which Trump would want to see come back to the US when compared to textile manufacturing, for example,” he said, adding that Trump may not be concerned about global supply chain complexities. - FMT